U.S. stocks surge as Washington and Beijing continue to hold trade discussions, while North Korea’s Kim Jong Un appears to have made a visit to China. Here are some of the things people in markets are talking about.
Asia stocks look set to rebound after U.S. equities surged back from the biggest weekly rout in two years, with major benchmarks climbing more than 2.7 percent on signs that an escalation of global trade tensions was beginning to ease. Chipmakers and banks led gains as the S&P 500 Index posted its biggest one-day jump since August 2015, while 20 stocks climbed for every one that fell. The advance erased Friday’s drop, though the gauge still had a ways to go to make up all of last week’s losses. Elsewhere, 10-year Treasury yields climbed ahead of major debt sales, while the dollar dropped to a five-week low.
Tariff Talks Continue
U.S. President Donald Trump’s administration is urging China to lower tariffs on cars and open its market to U.S. financial services as part of talks to resolve a rise in trade tensions that has shaken global markets, according to a person familiar with the matter. Treasury Secretary Steven Mnuchin called China’s Liu He to congratulate Liu on his appointment this month as vice premier in charge of economic policy -- and the two discussed the trade deficit between the two countries and committed to finding a mutually agreeable way to reduce the gap, the person said, adding they have exchanged correspondence. Senior Trump trade adviser Peter Navarro says the president is seeking a nearly one-third narrowing of the U.S. trade deficit with China.
Look Who’s Visiting Beijing
Kim Jong Un made a surprise visit to Beijing on his first known trip outside North Korea since taking power in 2011, three people with knowledge of the visit said. Further details of his trip, including how long Kim would stay and who he would meet, were not immediately available. The people asked not to be identified because of the sensitivity of the information. In other geopolitics news, the U.S., European Union nations, Ukraine and Canada expelled more than 100 Russian envoys in response to the nerve-agent attack on a former Russian spy in the U.K. Russia vowed to retaliate.
Chinese Power Moves
For international investors trying to gauge China’s monetary policy, life is set to get even more complex. Guo Shuqing, a high-profile banking regulator and ally of President Xi Jinping in cleaning up the financial system, was appointed as Communist Party secretary of the People’s Bank of China, according to the central bank’s website. The move places Guo, 61, above newly anointed governor Yi Gang in the political pecking order and ushers in a management structure with few global equivalents. To discern policy, there’s now not just one official to watch, but at least three: Vice Premier Liu He, who has the economic and financial policy portfolio, Guo as party boss, and Yi with operational charge of the PBOC’s diverse toolkit. Separately, China’s decision to give its top military body control over the country’s vast coast guard has increased concerns about the risk of miscalculation in the disputed waters of East Asia.
Caution in Kiwiland?
From afar, the economy inherited by New Zealand’s new central bank governor seems quite serene. Scratch beneath the surface, and some pressures are building. Adrian Orr today takes charge of an economy that’s in its 10th year of expansion, with record-high terms of trade and falling unemployment. That’s the good news. His economist’s eye will be swiftly focused on worsening capacity constraints, the sluggish outlook for inflation and whether low borrowing costs could rekindle a housing boom.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- Bitcoin drops below $8,000.
- Twitter joins Facebook and Google in banning crypto coin-sale ads.
- China tech titans are in the crosshairs of a U.S. regulatory proposal.
- Goldman says Big Oil is entering a "golden age."
- India cuts first-half borrowing plan in surprise to markets.
- U.S. recession may come just in time for Trump’s re-election bid.
- These are the most exciting watches from the year's biggest trade show.
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